AM Market Report – July 23, 2025 | The Western Producer

GOOD MORNING…HERE IS YOUR MORNING MARKET NEWS

OVERNIGHT GRAIN TRADE

ICE canola futures are seeing some decent rebound price action to start this morning…rallying $8/tonne higher. Chicago soybean futures are up 5 to 6 cents/bu, with the products (oil/meal) also posting modest gains.

Chicago corn futures are flat…steadying itself after seeing early-week selling pressure.

US row crop markets finished weaker Tuesday, pressured by generally favorable US crop development weather this week and higher yield expectations. There is a heat dome developing around the central US, but there remains rain in the forecast. Plus it’s July…July is always hot.

US wheat markets are mixed to mostly a bit weaker this morning… Minnie spring wheat futures are a penny either side of unchanged, HRW down 2 cents and SRW wheat 1 to 2 cents lower. Reports of plentiful near-term global supply amid the northern hemisphere winter wheat harvest continue to weigh on wheat futures.

In Other News

– US trade deal with Japan… US President Donald Trump said the US and Japan have struck a deal that will lower the hefty tariffs Trump had threatened to impose on goods from its Asian ally while extracting commitments for Japan to invest $550 billion in the United States and open its markets to American goods. The agreement…including a 15% tariff on all imported Japanese goods, down from a proposed 25%…is the most significant of the string of trade deals the White House has reached ahead of an approaching Aug. 1 deadline for higher levies to kick in.

Industry and government officials briefed on the agreement said the deal also lowers the tariff to 15% from 25% on Japanese autos, which account for more than a quarter of all the country’s exports to the US.

Two-way trade between the two countries totalled nearly $230 billion in 2024, with Japan running a trade surplus of nearly $70 billion. Japan is the fifth-largest US trading partner in goods.

But US automakers signalled their unhappiness with the deal, raising concerns about a trade regime that could cut tariffs on auto imports from Japan while leaving higher tariffs on imports from Canada and Mexico.

Matt Blunt, who heads the American Automotive Policy Council, which represents General Motors, Ford and Chrysler-parent company Stellantis, said that “any deal that charges a lower (15%) tariff for Japanese imports with virtually no US content than the (25%) tariff imposed on North American-built vehicles with high US content is a bad deal for US industry and US autoworkers.” Trump has threatened to hike tariffs on Mexico to 30% and Canada to 35% on August 1.

Worth noting…Trump’s announcement on Tuesday follows a pattern seen with previous such agreements. He beats the drum of the deal on social media shortly after a meeting or a phone call with a foreign official, but leaves many key details a mystery…making it more a murky memorandum of understanding than an actual formalized trade deal…often times more show than substance.

– Russia trims 2025 wheat harvest and export forecasts… Russia, the world’s biggest wheat exporter, has trimmed its forecasts for the 2025 wheat harvest and for wheat exports in the 2025/26 marketing season, Agriculture Minister Oksana Lut told a government meeting on Tuesday. Lut said the wheat harvest was now expected to be 88-90 MMT, versus the previous forecast of 90 MMT. Exports this season are now expected to be 43-44 MMT, down from a previous forecast of 45 MMT.

Drought has hit major Russian grain regions this year, with the grain crop in Rostov, the top grain and wheat-producing region in 2024, expected to be 8 MMT, down 30% on last year. Analysts said that a better than expected harvest in Stavropol, which is set to become Russia’s top wheat-producing region this year, as well as in central and Siberian regions, would offset the losses.

Lut said Russia exported 44 MMT of wheat last season. She noted that Russian wheat had gained access to 11 new markets, while seven countries had resumed purchases they had suspended. She said Russia’s goal was to maintain its leading position in wheat exports, the country’s main agricultural commodity. She also noted that Russia had become the world’s largest exporter of barley.

– France’s wheat harvest rises 30% but falls short of past average levels…This year’s soft wheat crop in France, the European Union’s biggest producer, is expected to rise to 33.40 MMT, up 30% from a rain-hit harvest last year, Argus Media said. That would still be below the average 2017-2023 level of 34.96 MMT, it said in a statement. While the national yield improved to 3.4% above the 2017-2023 average, a smaller cultivated area weighed on overall production. Analysts and traders have been expecting French production of soft wheat to rebound sharply this year after a disastrous harvest in 2024.

The French farm ministry last week pegged the country’s 2025 soft wheat production at 32.6 MMT, up 27% from last year and in line with market expectations.

France’s wheat crop had faced excessive winter rains and mixed spring weather. Despite improved rainfall in May and favorable sunlight during flowering, grain filling was constrained by hot weather in June. The quality of the 2025 crop will meet export standards, with most protein levels exceeding 11%, good specific weight and low humidity levels, Argus said.

– Saskatchewan, Manitoba sign Arctic Gateway deal… An agreement has been signed to strengthen trade through the Port of Churchill. Saskatchewan premier Scott Moe, Manitoba premier Wab Kinew and Arctic Gateway Group (AGG) have signed a memorandum of understanding to establish a northern trade corridor. “Streamlining access to ports, such as Churchill, will allow our goods better access to new and emerging international markets,” Moe said in a press release.

The provinces said the agreement will enhance infrastructure, streamline supply chains and boost access to global markets via Canada’s only deepwater Arctic port. “Churchill presents huge opportunities when it comes to mining, agriculture and energy,” Kinew said.

The agreement outlines a five-year roadmap with annual progress reviews. AGG will invest in port and rail assets and lengthen the shipping season to support increased freight capacity. Saskatchewan has agreed to mobilize commodity producers and exporters through its trade offices and regional industry partners. Manitoba will lead efforts to secure federal infrastructure funding and regulatory support to improve connectivity to northern markets.

Outside Markets

The Dow Jones Industrial Average rose 179.37 points on Tuesday to settle at 44,502.44, while the S&P 500 Index picked up 4.02 points to 6,309.62. Early Wednesday, September Dow Jones futures are up 230 points.

Global stock markets are trending higher this morning, buoyed by hopes of a trade agreement between the European Union and United States after Japan struck a deal that lowers tariffs on its autos, sending Japanese stocks to a one-year high.

Wall Street futures were in positive territory after the S&P 500 eked out another record close yesterday. TSX futures followed sentiment higher after Canada’s main stock index closed up yesterday on a boost from metal prices.

The trade deal news has “raised hopes that the US might be about to reach deals with other countries that avoid the higher tariffs on August 1,” Deutsche Bank analysts wrote in a note.

The September US Dollar Index is up 0.128 at 97.245. The Canadian dollar strengthened against its US counterpart…currently quoted at 73.72 US cents.

Sept crude oil futures are down $0.27 at US $65.04/barrel. Oil prices were a bit weaker again this morning…down for a fourth consecutive session…despite a US tariff deal with Japan improving global trade sentiment. But trade hesitancy persists as the hurdles and delays are being reported in talks with the EU and China that remain a drag on sentiment.

Grain Markets

Chicago soybean futures are trading 5 to 6 cents/bu higher this morning. Bean futures finished slightly lower Tuesday in very modest up/down price action. Forecasts into early August generally look hot in large swaths of the US soy growing regions, but with rain in many areas, which should limit some of the stress. Of course, that will depend on the rain actually showing up.

The USDA’s US national soy crop rating dipped in the latest week, but is steady with last year, and crop development is close to average. At least for now, that adds up to the trade expecting a large US bean crop in 2025.

Soymeal futures are up $1 to $2/ton this morning. Soyoil is up 23 to 33 points, trying to regain losses of similar sized posted yesterday.

Japan and the US agreed to a trade deal on Tuesday…with US import tariffs set at 15% starting August 1. But details remain lacking.

Meanwhile, China’s insatiable appetite for lower priced Brazil’s soybeans leaves US new crop export sales to the world’s largest importer at near non-existent. Between now and November, US exporter will have to find some soy business to China. US and China officials reportedly will meet about trade tariffs soon.

Demand from US soy crushers remains solid and soyoil still has a bullish US biofuels demand outlook. The looming question for soybeans continues to be new crop export demand from China.

Chicago corn futures are fractionally mixed to start this morning after posting declines yesterday. The corn market edged back towards their intraday lows at Tuesday’s close, settling with 4 to 5 cent losses.

The US-Japan trade deal announced late Tuesday seems to have had little to no impact on the corn market.

Rain is expected to continue across much of the US Corn Belt. Spec funds are selling the corn market as the US weather outlook changed on Monday from hot and dry to warm and wet. The market is taking on a “show me” approach about the reports of pollination problems. Otherwise, big yield expectations remain the prevailing sentiment.

The corn market continues to feel some pressure from Monday’s report from agribusiness consultancy AgRural, which increased its estimate for Brazil’s total 2024/25 corn production to a record large 136.3 MMT, up from 130.6 MMT.

US wheat markets are tipping lower this morning… Minnie spring wheat futures are a penny either side of unchanged, but leaning weaker. The winter wheats are generally 2 cents lower. All three US wheat markets closed with gains on Tuesday…spring wheat contracts finished up 3 to 5 cents at the close.

Wheat markets got a bit of an upward bump yesterday from the 2 point drop in US spring wheat crop ratings on Monday and reports of new crop Russian winter wheat supply coming a bit slower than expected into the commercial pipeline. But as the winter wheat harvest expands there, and across the Northern Hemisphere, available supply to the export market will soon ramp up considerably. Note that Russia’s total wheat exports are expected at 43 to 44 MMT…similar to the previous year.

As for North American spring wheat condition…forecasts over the next couple of weeks to have rain for parts of the region, which would be beneficial in both the northern US Plains and the Canadian Prairies.

US spring wheat tour… During Day 1 of the US Wheat Quality Council’s Spring Wheat and Durum Tour yesterday, those scouting wheat fields from Fargo to Bismarck, North Dakota, traversed six routes across the southern third of the state. They also witnessed the destruction caused by severe storms one month ago. On Monday, North Dakota Gov. Kelly Armstrong submitted a request for a presidential major disaster declaration for severe storms that impacted the state on June 20-21. Less than 24 hours later, 51 crop tour scouts visited 171 wheat fields in the state, arriving at a total weighted average yield estimate of 49.8 bu/acre (bpa). Last year, the average yield estimate along these routes was 52.3 bpa.

“The storm damage was evident at every farm you went by,” said Anne Osborne, executive director of the National Wheat Foundation. “There were downed trees, buildings without roofs and lots of damaged grain bins. It begs the question of where we’re going to put this crop because it’s a good crop.”

The storms that pummeled North Dakota in June produced 20 confirmed tornadoes, up to baseball-sized hail, damaging straight-line winds with gusts up to 111 mph and torrential rainfall that led to localized flash flooding. Yet, despite this carnage, the resiliency of the state’s wheat crop was on display during the tour’s first day.

CANADIAN GRAIN MARKET

ICE canola futures closed weaker on Tuesday, with improving Prairie weather weighing on the market. Cooler temperatures and much-needed showers are reportedly benefiting at least some crops. World Weather said active weather should continue across the Prairies this week, but warned crop areas farther north may not see much relief. Meanwhile, many areas are still plagued by dryness.

Strength in the Canadian dollar pressured canola as well.

Chicago soyoil and soybean futures closed lower yesterday, while European rapeseed and palm oil were higher.

November canola fell $4.10 on Tuesday to close at $690/tonne, and January was down $3.70 at $700.20.

For today… canola futures are bouncing $8/tonne higher to start this morning. Nov canola is up $8.40 at $698.40/tonne…butting its head against overhead resistance at the convergence of its 20- and 50-day moving averages at the $699 level and psychological resistance at $700. Will be interesting to see how the market proceeds from here…still in a downtrend off the June 19 closing high. But MACD and Stochastics indicators have been stabilizing.

Some price support in canola is being drawn by modest gains being posted this morning by CBOT soy complex and EU rapeseed markets.

Malaysian palm oil futures rallied overnight, extending solid gains from Tuesday and boosted by price strength in other edible oils. The Malaysian Palm Oil Council said it expects prices to remain supported over the next month due to strong soyoil markets and rising festive demand from top palm buyer India.

Agriculture Canada this week has lowered its old- and new-crop canola ending stocks estimates from last month amid rising demand projections. In a monthly supply/demand update, Ag Canada trimmed its 2024-25 canola ending stocks estimate by 50,000 tonnes from June to 1.1 MMT, a 12-year low. Meanwhile, forecasted 2025-26 stocks were slashed to an identical 1.1 MMT from the previous month’s 1.85 MMT.

Ag Canada’s latest reflect Statistics Canada’s June acreage report, which estimated 2025 Canadian canola planted area at 21.457 million acres, down less than 200,000 from the federal agency’s first new crop acreage report in March and 2.5% below a year earlier.

As part of that report, StatCan also took the opportunity to retroactively revise its 2024 production estimate higher, up to 19.184 MMT from the previous projection of 17.845 MMT. The 2023 crop was bumped higher as well, to 19.463 MMT from 19.192 MMT.

The larger production estimates allowed AgCan to remedy the negative 2024-25 feed, waste and dockage numbers it was forced to use in its May and June supply/demand updates due to much stronger-than-expected export and crush demand. The additional supply also allowed AgCan to raise its 2024-25 export forecast by 500,000 tonnes from June to 9.5 MMT…42% higher than last year and 17% above the five-year average.

For the 2025-26 crop year, the slightly lower 2025 canola planted area estimate contained in the June acreage report means Ag Canada is now forecasting new crop production at only 17.8 MMT, down 200,000 from June and potentially the smallest crop since 2014, excluding the 2021 drought-hit crop of 14.248 MMT.

With the drop in production and this month’s slightly smaller carryin from the 2024-25 crop year, the total new crop canola supply is estimated at just 19 MMT, down from 22.355 MMT the previous year and 21.597 MMT in 2023-24. Ag Canada left its 2025 average canola yield estimate little changed from June at 37.1 bu/acre, versus 38.7 bu last year and potentially also the lowest since 2014, excluding the drought year.

On the demand side, Ag Canada left its 2025-26 canola export forecast steady from June at 6 MMT…a four-year low…but raised the crush to 11.5 MMT, up 500,000 and matching the previous year.

Noteworthy that AgCan suggests a 3.5 MMT cut to Canadian canola exports for 2025-26 due to a lack of supply. And the market will be responsible for keeping prices high enough to ensure that.

“New-crop canola enters a market of heightened uncertainty as a result of the current policy environment,” Ag Canada said, noting tariff and trade unknowns, as well as questions around renewable fuel mandates. “However, indicators suggest sustained demand for canola.”

Ag Canada forecast the 2025-26 average canola price at $725/tonne this month, up $25 from June and $50 above the estimated 2024-25 average.

To access the latest futures prices, go to https://www.producer.com/markets-futures-prices/